If Disney Plus wants to restart its suddenly sputtering growth rocket, it’s going to need some new fuel, retiring Disney Chairman said Tuesday.
“I think [Disney Plus] needs more volume,” Iger said, speaking about the subscription streaming service as part of a series of CNBC interview segments that aired Tuesday. “And there probably needs to be more dimensionality, meaning, basically, more programming or more content for more people, different demographics. But, [CEO Bob Chapek] is aware of that and is addressing those issues.”
You’d think spending more would be easy enough. A new report by Ampere Analysis says the subscription VOD streaming services collectively spent nearly $50 billion on programming, though sector leader Netflix accounts for 30 percent of the total.
Disney spends plenty on its own, some $18.6 billion. In fact, by Ampere’s analysis, Comcast CCZ ($22.7 billion) and Disney units each collectively exceed Netflix’s investment in “professional video content.” But both companies spend a lot of money on sports rights (a third of their spending), and shows for their legacy broadcast and cable outlets.
Still, doing more of what you’re already doing should be relatively easy, particularly if it involves repurposing internal dollars for streaming first. It’s the part about adding “dimensionality” to Disney Plus that gets complicated, especially while keeping the Disney brand in one piece.
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Disney Plus quickly shot to more than 100 million subscribers during the pandemic, thanks that blue-chip portfolio of family-friendly blockbusters from Marvel, Star Wars, Pixar, National Geographic and Disney’s vast animation library.
The quick ramp-up in subscribers suggests the audience for Disney Plus programming is large. The flattening rate of subscriber growth this fall suggests that audience isn’t endless. How does Disney move beyond that core audience to a broader array of programming that still protects its prized name?
Music programming is an option. The Disney Plus offerings include Billie Eilish’s Happier Than Ever “concert experience,” the filmed version of Hamilton, High School Musical spinoffs, and Beyonce’ and Taylor Swift projects. The massive Peter Jackson documentary The Beatles: Get Back got back lots of audience members who weren’t Fab Four fanatics.
But even music projects hold hazards for Disney Plus. Imagine the shrieks if Disney Plus picked up Todd Haynes’ wonderful exploration of the Velvet Underground, which gives full coverage to the band’s abiding interests in heroin use, S&M and other taboo topics.
Disney could also look beyond its own Burbank-built franchises to overseas producers, much as Netflix has done so profitably with series such as Lupin, Squid Game, and Money Heist. None of those projects seems like the sort of thing that would fit on Disney Plus, however.
Ampere is predicting only a modest overall increase by programming spending from 2021, to an all-media total of $230 billion worldwide, driven once again by the SVOD services. But
Perhaps the best immediate opportunity to project “dimensionality” is better integration with corporate label mates ESPN Plus, Hulu, and Star, though it’s clear that Disney still isn’t clear about what’s happening with bundling its various streaming services both domestically and internationally.
Star, the international service, includes tabs for Disney Plus. And skinny bundle Hulu Plus Live TV now includes both Disney Plus and ESPN Plus alongside a recent $5 per month price hike.
Iger’s comments suggest Disney execs clearly know something must be done to restart growth, given their continued projections that Disney Plus will have 230 million to 260 million subscribers by 2024 (it has 114 million now), and the precipitous drop in share prices since September, as Chapek foreshadowed flattening subscriber growth.
Now comes the hard part. Getting bigger and broader, while keeping the Disney brand squeaky clean for its core fans will no doubt preoccupy company executives heading into 2022.